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On July 31, 2023, the European Commission adopted the Delegated Act on the first set of European Sustainability Reporting Standards (ESRS). The ESRS lay out detailed reporting requirements for companies under the scope of the CSRD (Corporate Sustainability Reporting Directive), which has been adopted by the European Commission in April 2021.

Both the ESRS and the CSRD are part of the EU Action Plan on Sustainable Finance, which includes reporting under the EU Taxonomy and the SFDR.

đź“– What is EFRAG?

EFRAG, the European Financial Reporting Advisory Group, operates as an autonomous advisory entity, primarily financed by the European Union. The formulation of its provisional standards involves extensive collaboration with investors, corporations, auditors, civil society, labor unions, scholars, and domestic standard-setting organizations.

đź“– ESRS and double materiality

The ESRS follows the “double materiality” approach to sustainability. This means that they do not only consider the impact of outside factors (such as environmental and social risks) on the financial performance of the entity considered, but they also take into account the impact of the organization on the outside world, e.g. the way in which the company’s products, operations and governance structure affect environment and people.

The ESRS can be divided into three main sets, which are also being released and approved in a phased manner.

There are two sets of “cross-cutting” ESRS, the ESRS 1 and the ESRS 2, which outline the general principles behind the standards, the general structure of disclosures, as well as some general disclosure requirements, across Environmental, Social and Governance dimensions.

There is then a set of “topical” ESRS, outlining specific data points to be disclosed under the Environmental, Social and Governance dimensions and according to issues that are material to the company, which are currently still in draft form. The approval timeline of the “topical” ESRS has been moved from June 2024 to June 2026.

Who do the ESRS apply to?

The ESRS will apply to:

  • Large EU Companies*
  • Most companies with listed securities on EU-regulated markets (also non-EU based)
  • Non-EU parent companies with a combined turnover in the EU of more than 150mn.

*250 employees, net revenue of EUR 50mn, or total assets of EUR 25mn

What’s the ESRS implementation timeline?

The ERSR officially entered into force on January 1 2024, but reporting is planned for 2025. They are already applicable to companies who are under the scope of the NFRD (which is being phased-out in favour of the CSRD, and covers bigger companies, with over 500 employees and Public Interest Entities (PIEs).

Listed SMEs should enter in scope in year 2025, with the option to opt-out from reporting requirements for two years. Non-EU parent companies with substantial activity and presence* in the EU will enter in scope in 2028.

*Such as parent companies with at least 1 subsidiary company that’s under the scope of the CSRD, or that have had a net turnover of over 150mn in the EU for each of the last two consecutive years, or that have at least one EU branch that generated over 40mn in net revenue in the last year.

Setting the stage: ESRS 1: General principles

The ESRS 1 are all about laying the groundwork for the ESRS: they detail the general principles which lie at the core of the CSRD framework. According to the ESRS 1, entities that are subject to the CSRD must disclose material information about their sustainability-related risks, impacts, and opportunities.

The ESRS 1 additionally clarified that some sustainability information should be disclosed by all companies, regardless of materiality assessments. These “universal disclosure requirements” are further detailed and developed in the ESRS 2.

This includes information about governance, strategy, management of impacts, risks, and opportunities, and certain metrics and targets associated with climate change.

Beyond materiality: ESRS 2: General disclosures

The ESRS 2 (General disclosures) detail general disclosure requirements that apply to all companies under the scope of the CSRD,  regardless of any “materiality” consideration.

For example, it mandates that the company should disclose whether the disclosure has been conducted on a consolidated or individual basis, or to what extent the disclosure covers downstream and upstream value chain, but also the time horizon, source of estimation and so on.

Some information regarding governance, strategy, and impact, risk and opportunity management must also be disclosed by all companies, according to the ESRS 2.

The ESRS 2 further illustrates some of the ESRS data points that emanate from other, related European regulations, such as the SFDR and the EU Climate Law. This is extremely useful because it helps unpack the interoperability of ESRS with other European sustainability regulations.

Going deeper: Topical ESRS

The final set of ESRS is the so-called “topical” ESRS. These will lay out requirements that are specific to a range of social, environmental and governance issues. To determine which of the issues laid out by topical ESRS apply to them, companies must perform a materiality assessment.

There are 12 topical ESRS in total:


E1: “Climate”

E2: “Pollution”

E3: “Water and marine resources”

E4: “Biodiversity and ecosystems”

E5: “Resource use and circular economy”


S1: “Own workforce”

S2: “Workers in the value chain”

S3: “Affected communities”

S4: “Consumers and end users”


S5: “Business conduct”

The topical ESRS have been released, in draft form, by EFRAG earlier in 2023. Even though they are to be subject to materiality assessments, EFRAG proposed the topical ESRS to be mandatory.

In the EFRAG Draft data points list, the topical standards are associated with more than 1100 data points in total.

Infographic steps to implement ESRS Topical guidance

A look at EFRAG’s draft guides to implement the ESRS

To help companies comply with these disclosure requirements EFRAG has drafted and published three documents that can be downloaded directly from EFRAG’s website:

  • EFRAG Implementation Guide 1 outlines the requirements for reporting on the materiality assessment process. This guide includes a step-by-step illustration of the process and frequently asked questions (FAQs) regarding the double materiality assessment.
  • EFRAG Implementation Guide 2 focuses on reporting requirements related to the value chain in the materiality statement. This guide addresses impact, risk, and opportunity management, as well as metrics and targets. It also defines the reporting boundary for sustainability reporting, offers FAQs for clarification, and includes a 'value chain map.'
  • EFRAG Implementation Guide 3, a detailed guide on the implementation of ESRS datapoints. This guide presents the complete list of ESRS data points in an Excel format (the EFRAG “ESRS excel workbook”) supplemented by an explanatory note for better understanding the data point requirements.

Note that the guides above are still in draft form, and the EFRAG proposes their content to be non-authoritative. Meaning, they do not have legal value but are supposed to be viewed as guidance for companies under the scope of the CSRD and of the ESRS.

đź“– The ESRS excel file explained

‍The explanatory note issued by EFRAG detailes that there are three main data types categories in the excel file DRAFT list of ESRS data points (IG 3): 1) Numerical and quantitative data points 2) Semi-narrative data points (e.g. dates) 3) Narrative data points (block of texts, qualitative information).

The Draft EFRAG IG 3 List of ESRS Data points. Please note that this list is still in draft form, and feedback is open to the public until February 2, 2024.

In spite of EFRAG’s efforts toward clarification and simplification, going through and verifying compliance against all the issues that are material to your company is still largely a manual and time-consuming exercise for most companies and auditors. Here’s where tools like Briink’s AI Questionnaire Assistant can come at hand.

We have asked our AI to automatically screen a company against the ESRS E1 (Climate Change), and this was the result:

Briink helps you screen evidence for the topical ESRS from documents. The E1 data point list is currently available as a template.

We used Briink to screen a company document against the 154 E1 data points (Climate Change) in just a few minutes. We also provide source references so that you can identify the sections of the documents the evidence was pulled from. You can additionally edit the results in Briink (the results which are purely AI-generated will be flagged in your exported excel file).

Sometimes trying things is better than just reading blog posts. You can try the Briink ESRS AI template for free here.

The first template available in Briink is E1 (Climate Change). But we are working on adding more ESRS data points templates. Watch this space!

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